Celebrating 160 Fabulous Years

Speech given by Dr Tim Cooper AM, Managing Director and Chief Brewer, to mark the 160th anniversary of Coopers.

On this 160th year celebration it is a privilege for me to give you some insight as to the changing fortunes of the brewery over those years. Although Coopers is now the largest Australian-owned brewery and supplies 5% of the national beer volume, it has not been a straightforward progression. The waxing and waning of the business saw five episodes of near-death experience for Coopers.

On the 13th May in 1862, ten years after his arrival in Adelaide with his young family, Thomas Cooper brewed his first beer as a restorative tonic for his ailing wife Ann. Ann was the daughter of a publican in Yorkshire, and she gave him the recipe. Two years later he wrote the following to his brother in England: “there are some half-dozen breweries besides ours in and about Adelaide, but they use a good deal of sugar and so on for brewing, but we use only malt and hops, consequently ours being pure the doctors recommend it to all their patients”.

Following some early success Thomas fell upon hard times in the late 1860s when he lost his house in George St Norwood and sold his brewing equipment before moving into rented premises in High St Kensington in 1869. Despite losing everything, Thomas was not declared insolvent, and, fortunately for us, he somehow managed to keep brewing; from this neardeath experience his sales were back to former levels by 1878. Thomas was then able to buy property in Upper Kensington, leading to the establishment of the Leabrook brewery in 1881. Within a few years, Coopers’ beer volume had increased to around 150,000 litres, but remained at this level until well after the death of Thomas in 1897. Thomas left the running of the brewery to four of his sons (John, Christopher, Samuel and Stanley) who had embraced the family trade.

As a devout Methodist, Thomas disapproved of selling beer to public houses. He would have followed the precepts of the founder of Methodism, John Wesley, who believed that beer was good, whereas wine and spirits were not. Wesley thought that beer should be consumed at home. The second generation decided to start selling to hotels in 1905, after which Coopers’ sales volumes increased, such that annual volume grew to more than 1 million litres at the end of the 1st World War.

Following a substantial investment in brewing and bottling equipment in 1925, sales accelerated to 4½ million litres by 1928 (representing over 15% of the state volume). However, a second period of difficult trading followed with the Great Depression, when sales dropped to less than half, and did not reach this peak volume again until after the 2nd World War. Coopers and South Australian Brewing (SAB) became the sole remaining brewers in South Australia after the closure of their last competitor in 1954, when Coopers’ annual volume jumped to 8 million litres. Despite further brewery development in 1957, sales remained below this peak until the early 1970s.

Coopers began brewing lager beer in 1968, a decision taken by the third and fourth generation Coopers, leading to improved sales and reaching a new production peak of nearly 14 million litres in 1975. However, the success was short-lived because of excise increases imposed by the Whitlam government. This led to a third near-death period, when the profitability dropped to levels that threatened our ability to service the debt incurred from investments made for lager production and upgrades to packaging. In 1976, my father Bill declared to the family that if we did not survive the next six weeks, ‘we were gone’!

As an aside, some years later, in 1988, Bill visited the new Parliament House in Canberra; he was asked by the then Leader of Opposition Andrew Peacock what he thought of the $1.1 billion building (considered the most expensive building construction in the world at the time) – he said that it was very impressive and that the beerdrinkers of Australia had paid for it in just nine months!

The saving grace for survival from the squeeze between excise increases and the impact of interventions to control inflation, was the launch of Brewers Own Homebrew in 1977. Bill and Maxwell, the fourth-generation cousins, made this decision to diversify into home-brew which became a runaway success. Home-brew became the saviour of the company at that time, and even into the early 1990s. Following the introduction of cans of concentrate in the mid-1980s, sales grew strongly nationally and overseas, such that, by 1990, Coopers became the largest manufacturer and exporter of home-brew concentrates in the world.

Bill Cooper also injected a strong marketing effort into promoting Coopers beers both nationally and internationally through the 1980s. A resurgence of interest developed in our traditional ale products, augmented by the introduction of naturally conditioned beer into kegs, saw beer sales increase to 19 million litres by the end of the 1980s.

However, the recession that “we had to have” in the early 1990s saw Coopers beer volume in 1993 shrink back to less than 12 million litres. Contrary to popular belief, beer sales in fact decrease in recessionary times, and, given that much of our sales were in the interstate premium market, the recession compounded our fourth near-death experience in the early 1990s. During the 1980s, with improved performance, the fourth generation diversified into areas away from brewing, but, apart from a successful investment in a malting plant, the other investments lost money, bringing us close again to bankruptcy.

Fortunately, home-brew was still growing, and we just managed to scrape through, but operating under the microscopic scrutiny of the banks. As the economy started to grow, we were fortunate that Lion Nathan bought SAB in 1993 and made the excellent decision to sell the 110 or so pubs in the former tied estate of SAB, which meant that our Pale Ale was able to be sold on tap in an increasing number of hotels. Pale Ale kegs had been introduced in 1989, but the freeing up of the hotel trade allowed Glenn Cooper and his sales team to grow sales steadily from 1995. With targeted promotion, a younger generation rediscovered our cloudy ales, and sales again began to improve.

Through the 1990s, we increased our focus and investment in beer quality through process improvements, and by the selection of a single ale yeast strain to enhance the consistency of our ales.

With beer sales on the move again, we ran into another problem - we had outgrown the site at Leabrook where Thomas had built his brewery in 1881. Bill, Maxwell and I discussed the urban constraints and pondered the inevitability of an enforced move from Leabrook to a new site. Fortunately, we were able to purchase the former State Transport property at Regency Park in April 1998 and commence the planning for the construction of a new brewery, enabling us to complete the relocation of operations from the old Leabrook site in 2001.

We have won a number of awards for the new brewery, particularly for its favourable environmental features – we have a Cogeneration plant that generates power both for the brewery and for the grid, as well as steam for the brewery derived from the waste heat of the gas turbine.

In a stroke of serendipity, we accepted an offer to form a joint venture company with the former distributor of Budweiser, to grow our beer sales interstate. This quickly tested the capacity of the new brewery, as we achieved double digit growth through incremental gains in distribution and strong sales representation, growing progressively from 2003 until we grew to more than 80 million litres in 2017.

The opening of the new brewery and Coopers’ subsequent rapid growth didn’t go unnoticed by our competitors, which leads to the fifth period of nearloss. In 2005, rival brewer Lion Nathan launched a hostile takeover attempt, just before they were about to lose a court case which would have the effect of Lion forfeiting its protected status in terms of pre-emptive share rights enshrined in the Coopers Constitution. These clauses in the Constitution arose when, in 1995, we received back shares formerly owned by SAB.

The initial takeover bid by Lion Nathan offering our shareholders $260 per share was rejected by the Coopers Board. Lion Nathan’s attempt to sway us to accept the offer, which was increased to $310 per share, became more intense as they appeared to understand the strength of resolve of our shareholders to change the Constitution.

When finally, after a long delay compounded by many court actions and appeals to the Takeovers Panel, shareholders were finally allowed to vote on removing these special clauses, the vote was carried 93.4% to 6.6% to block Lion from purchasing shares. The vote was a clear message from our shareholders that they did not want to lose their independence – Lion did not understand that, for our shareholders, the issue was more about loyalty and tradition than it was about money.

As we look forward, we have much to be thankful for. We have a vision to passionately commit to celebrating two centuries as an independent family company, crafting the finest beers and natural brewing products. Passion is one of our five Guiding Principles, the others being Consistency, Responsibility, Respect and Service.

For example, we pursue consistency in our product quality, we encourage respect for our colleagues, suppliers and customers. As a corollary of this, we enjoy long-term relationships with our suppliers, such as Ellerslie Hop of Victoria, which has seen four generations selling to four generations of Coopers, and our 30-year relationships with packaging suppliers Orora (formerly Amcor) and WestRock. These suppliers, including off-shoot Opal, are much involved in the brand refresh that our marketing team under fellow director Cam Pearce has engineered, and which will be seen in the market in the next few months.

Also, in regard of long relationships, we have recently concluded contract extensions with our brewing partners of Sapporo and Carlsberg, both of which span more than ten years.

In terms of service, we are blessed with the contribution of not only family members, but of our many longserving employees who continue to devote their skills and passion to making Coopers what it is today. We clearly enjoy longevity at Coopers, as demonstrated by one employee who, when encouraged to retire at the age of 70, stated that when he began at Coopers, he was told that he had a job for life.

Reflecting on our Guiding Principle of Responsibility, I want to highlight the work of our Coopers Brewery Foundation, under the chairmanship of Melanie Cooper. Since its inception in 2006, the Foundation has now donated more than $6.5m to Australian charities, and the company has donated the lion share of the funds in the Investment Fund of the Foundation, which now sits at $10m.

Our Guiding Principle of Passion is exemplified in our attitude to our products and our brewery. To this end, we are proud to have invested $68m in the maltings, which we completed in 2018, and you have probably seen the recent news of our forthcoming investment in our brand home. This $50m new visitor centre is about celebrating our history and our originality, with an emphasis on what makes Coopers different. We look forward to welcoming domestic and international visitors to our brewing home to hear about our past, to learn about the art and science of brewing and to taste our beers, and, in the future, our whisky. Our sixth-generation family employees, Louise and Andrew Cooper, have been involved in the design of this facility as it will be theirs to curate and manage over their future in the business. The visitor centre, along with other investments in the pipeline, will bring our total investment at Regency Park to close to $400m.

So, although much has changed since brewing in wooden barrels in Thomas Cooper’s day, successive Coopers have continued to celebrate Thomas’ vision of providing a healthy beer for an appreciative public.

We enjoy much support from an expanding band of loyal beer-drinkers and increasing numbers of dedicated and supportive publicans around Australia. We owe much to you, our partners and supporters, for the success we have witnessed in reaching the milestone of this 160th year of our brewing history. Thank you for celebrating with us, and for your ongoing support of Coopers.